Having a tenant that pays on time and never causes a fuss is as good as gold. But nightmare tenants are real, and they’re pretty common, especially for investors who operate multiple investment properties.
So what are you supposed to do with an unruly tenant who pays rent late, annoys the neighbors, destroys the property, and makes rational communication nearly impossible?
Here are a few suggestions to deal with problem tenants.
Screen Tenants With Fierce Precision
The easiest way to deal with problem tenants is not to have them in the first place. Sure, that’s easier said than done, but diligently screening prospective tenants is your first line of defense when it comes to avoiding terrible tenants from the get-go. An in-depth screening process should include:
- Running a background and credit check
- Calling previous landlords and references
- Corroborating their income (which ideally should be a minimum of three times the rent)
Even if one of the above doesn’t meet your criteria, don’t hesitate to politely decline and move on to the next prospective tenant. The screening process may take some time and effort, but it’ll save you a ton of headaches in the long run.
Draft a Detailed Policy in Writing
It’s a lot easier to follow the rules when they are actually written down to be read. Having a written lease is a no-brainer before allowing anyone to occupy your unit, but it’s got to be as detailed as possible.
Include specifics such as the exact date that rent is due, how much is payable each month, when the contract expires, names of all individuals who will occupy the unit, no-smoking policies, what can and can’t be altered in the unit, and so forth. There are literally dozens of items that can be listed on the lease. And the more detailed, the better.
In addition, make sure you specify the consequences for not following the rules stipulated in the lease. If they’re two weeks late paying their rent, outline how much interest will be charged per day. If they damage the floors, specify the cost associated with repairs that they will be responsible for paying. The list can go on and on. But as long as it’s all in black and white, they will have no excuses and little recourse.
Be sure to have your real estate agent or lawyer review the lease terms before the contract is sealed. Get it all in writing from the start and show your prospective tenant that you are a professional when it comes to your investment property.
Vehemently Stick to the Ground Rules
While you don’t exactly want to walk around like a dictator, you also want to make sure that you’re taken seriously. Many issues that stem from unruly tenants are actually the fault of the landlords. Maybe they were too lax with the rules, or perhaps they let a few late rent payments slide one too many times. Tenants won’t take you seriously if you’re too flexible like this. Give them an inch, and they’ll take a mile.
Being as strict as possible while still being fair and empathetic will increase the odds that the rules will be closely followed.
Build a Good Relationship
If there’s mutual respect between you and your tenant, the entire deal can be so much simpler and less stressful. Establishing a good rapport and maintaining respectable terms with your tenant from the start is critical.
If you show your tenant that you are doing your best to ensure the place is always up to par, and that you are responding to their needs and emergencies when necessary, you’re more likely to get the same level of respect in return.
Keep Lines of Communication Open
Make sure that your tenants feel comfortable with approaching you about anything that may be of concern. Open communication in a business relationship is important. You don’t want to have to tiptoe around any situation that needs to be dealt with in a timely manner, nor do you want your tenant to feel the same way about you.
Be on the alert of their actions and keep tabs on any potential issues when it comes to their interactions with the neighbors. Just don’t be a helicopter landlord and treat them like they’re toddlers. They do have the right to privacy, after all.
Hire a Property Manager
If you’re a bit of a softy and aren’t the confrontational type, then hire someone else to do the dirty work for you. Hiring a property manager might cost some cash, but it can save you a lot of time and headaches, which are money suckers on their own.
Property managers do this for a living, so they know exactly how to deal with all sorts of scenarios. They’ll collect your rent, deal with repairs and maintenance, and even find you new tenants if the present ones need to be given the heave-ho at some point in the near future. And if you’re holding more than more investment property, a property manager makes even more sense.
Get Rid of Them
If you’ve exhausted all efforts and tactics, and have given your tenants more than enough opportunities to smarten up, then there’s no reason why you can’t kick them out, as long as the lease permits it at this time.
If their 12 months have come and gone, and they’re now occupying your unit on a month-to-month basis, you have every legal right to ask them to vacate the premises by giving them written notice in advance. Thirty days notice is typical, but you should double check the laws in your state for specific requirements.
Don’t Be Afraid to Go the Legal Route
If notice of eviction was given with more than enough lead time, and the tenants still haven’t left, don’t be afraid to take the legal road. Get a qualified lawyer to help you quickly evict the tenant.
If you are having serious issues, an attorney experienced in landlord-tenant laws can help you with your eviction and make sure that every rule is followed so that the process goes smoothly. Let the courts help you settle the matter. Just make sure you don’t do anything that could compromise your position.
The Bottom Line
Dealing with crappy tenants isn’t fun, but it’s likely to happen from time to time if you’re an avid property investor. But your overall experience doesn’t have to cost you your sanity, as long as you deal with the situation in a professional manner and do your due diligence. Treat this as a business, and don’t take things to heart. Assemble a team of pros, including a real estate agent and lawyer, to help you deal with problem tenants and move on.